I may just end up getting a rental car for the next 5 years! LOL
San Diego, CA (PRWEB) December 20, 2011
When faced with his 20 year old SUV with 330,000 miles on it blowing its engine, RoadFish.com author compares the price of fixing his old Land Cruiser, with buying the new car of his dreams, A Chevy Suburban or the 2010, and 2008 versions of it.
All of the below assumes someone who would have a good credit check.
At RoadFish.com David Klein the author, tells the story of how his 20 year old Toyota Land Cruiser has finally bent a rod and needs to have it's engine rebuilt. Using Edmunds.com True Cost of Ownership calculator Klein shows that the first year the car depreciates tremendously, and that there is great value in not buying the car brand new.
Then the comparison shows how over the next few years, the cost of buying a 2010 Chevy Suburban is exactly the same cost as buying a 2008 Chevy Suburban, when you take into account the cost of repairs, insurance and gasoline.
Edmunds.com says of its True Cost of Ownership Calculator "The Edmunds Inc. True Cost to Own® (TCO) pricing system calculates the additional costs you may not have included when considering your next vehicle purchase. These extra costs include: depreciation, interest on your loan, taxes and fees, insurance premiums, fuel costs, maintenance, and repairs. Search here to view the TCO of any vehicle."
A sample of the blog that contains the comparison,
"So if I buy a brand new 2012 Suburban, 4 wheel drive, and leather interior, LTZ and you assume I drive about 15,000 miles per year, the cost to drive that car for 5 years is $71,318.
And then if we get a 2010, 2 year old, same car, the cost to drive for 5 years is $58,000.
If we go back another 2 years to 2008, then the cost to drive it is $57,295.
On the other hand, if I worked out the killer deal of deals at the car rental place, I could rent a Chevy Suburban for $750 a month, or $9,000 a year. On top of that I would still need insurance, for about $1200 a year, as well as gas for $3353, would cost $13,553 per year, or $67,765. That is actually cheaper than buying a new one, and you drive a brand new car at all times, in fact if the car even gets dirty, or breaks in any way, you just take it back to the rental place."
The author then goes on to compare this to the cost of perpetually renting a new Suburban from Alamo Rental Cars. He shows that while renting the car is the most expensive way, it takes the hassle of maintaining the car down to nothing.
In conclusion, the article determines the one bad financial decision to be buying a brand new Suburban, or buying one that is 2008. It ends up deciding between the 2010 Suburban and renting. In the end it makes the conclusion that the perpetual rental model may just end up being the best choice.